The Danger of an Ideation-Only Innovation Strategy

It only takes a cursory search of many of the leading management strategy journals and periodicals to figure out that this notion of 'innovation' is on the mind of many senior and influential leaders within the business world and has been for quite a while now.

We are finding however that with a presumed lack of a comprehensive solution to motivating, capturing and managing innovation in the enterprise organisations often implement a 'just capture the ideas, we’ll figure the rest out later' strategy to fostering innovation.

The thought goes something like this:

Since we don’t have a structured program in place to capture, formulate, valuate, define and select ideas for investment, we’ll just focus on capturing them for now. That way when we eventually define our process for managing innovation we’ll have a bucket full of ideas to work from.”

Sounds reasonable, but we are convinced that this is inherently counter to the desired outcomes of this strategy.

Dangers of an “Ideation-Only” Strategy

Innovator Disenfranchisement

Our team has seen this in several cases in the past several years specifically where organisations have implemented a tool (typically software-driven) for capturing ideas for organisational, process, service, product or market improvement. Obviously the implication of this type of “21st Century Suggestion Box” is that the ideas actually get acted upon... but do they?

When there is a lack of follow-through on ideas the innovators become disenfranchised, lose trust or faith in the organisation’s ability to execute or just feel unvalued.

This disengagement can take substantially longer time to repair and can be a costly undertaking.

Unmanaged Execution

When the process of cultivating an idea from conception to implementation is not structured, it is often left to the Herculean efforts of a few to 'hit a home run' by simply figuring it out in a vacuum. Without a clear mandate, guidance, resources and motivation good ideas can often die from lack of support.

Emotional Investment

When there is no transparent and structured process of assessing the alignment and business value of an idea, innovation can fall into a subjective (and often politically-influenced) investment decision where the “popular guy” with the bad idea is awarded investment over the “less popular guy” with a great game-changing idea.

Peer Exposure

People are naturally wary of exposing themselves through their ideas to their peers ... and for good reason. All too often those ideas can be challenged (at best) or ridiculed (at worst) in a direct fashion or even in more passive-aggressive ways.

Voltair once said that “our wretched species is so made that those who walk on the well-trodden path always throw stones at those who are showing a new road.”

Misalignment and Lack of Direction

We often judge the merit of an idea based on it's novelty, but in reality the value in capturing innovation is when it is applied to a real, or even perceived, problem.

In order to solve a problem, one must be introduced to a problem. Which manager will get the better result from his team, the one who asks 'hey guys, if you have any ideas be sure to let me know or drop them in the suggestion box', vs. the manager who says, 'hey, I noticed that our product returns have gone up since we introduced the new design change ... can we put our heads together to come up with some ideas on how to improve the design in such a way as to reduce returns by half?'.

Benefits of Innovation Management (vs. Simple Ideation)

There are many benefits to a structure innovation management program, including transparency, objectivity, communications, team building, reduced cost, reduced risk, increased return, etc. Some of the following however are less known or discussed… all however can be measured and argue for formalization (not bureaucratization) of the innovation process within your organisation.

Developing Informal Networks

As ideas gain support, invariably informal networks will form around the idea. In some cases this will be in the form of communities of practice and in others it will be stakeholders that seek to gain a benefit from the idea in question. As an organisation you want to support and encourage these informal networks even if they reach across organisational boundaries. Why? Because networks-of-interest, communities-of-practice and other such informal networks inherently drive worker engagement, job satisfaction and even capacity and efficiency.

Strategic Alignment, Focusing on Challenges

When the Innovation Management Lifecycle includes strategy alignment up front whereby organisational challenges and priorities are well defined, then the creative efforts of the innovators are focused on defined issues and opportunities which serves as a pre-qualifier for the idea generating process (or at least the pre-condition for additional investment).

The flip side to this however is that innovation can occur outside of known challenges, for instance to address a new market or to resolve a problem that has not fully manifested itself.

Portfolio Management

With finite and even constrained resources, it is important to understand how to manage a portfolio of innovation and to understand funding requirements as they pertain to anticipated return and alignment to strategic objectives. Simply the ability to increase investment in innovation that contributes most directly to the bottom line or some other objective is argument enough for a structured methodology for managing your innovation portfolio, but even more so (and often less appreciated) is the ability to “kill” a concept early if it is not aligned with corporate priorities, doesn’t address a problem, is too risky or just doesn’t offer a return. This alone can reduce investment in failed innovation and ultimately increase the confidence of management and the workforce in the outcomes of investment in innovation.

It shouldn’t be a surprise that modern portfolio theory applies to your innovation portfolio. The concepts around risk and return directly correlate with the information that we need to be tracking in the early stages of the innovation process lifecycle.

The Value of a Failed Idea

Often overlooked is the value of a failed idea. The scientific method is predicated on the concept of observing, challenging, hypothesizing and test. Without failing, you don't know when, how or where to change your challenge or hypothesis. Without that you can't zero in on an aligned solution.

In some cases the value of a failed idea is even more 'financially aligned' when you consider that in some jurisdictions (Canada in particular) you can receive funding, tax credits or other forms of support simply for exercising the innovation muscle, so to speak.

Implementing an Innovation Management Program

Innovation management does not have to be over thought. In fact, implementing an innovation management program can be iterative and start with a simple ideation strategy, including a suggestion box (or even an electronic form of one).

Our team has worked successfully with a number of clients to get started quickly, easily and cheaply in order to start capturing value in your team’s inherent ability to generate business value-adding ideas.

But what about you? What experiences have you had in the failures and successes of innovation development? What works? What doesn't?

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We accelerate bottom line outcomes for the CFO through SG&A Optimization, Spend Management, Cost Transparency, and Analytical and Predictive Modeling by understanding a) the priority business outcomes you must achieve, b) the capabilities required to achieve them, and c) the means to accelerate the development of those capabilities in order to realize business value faster.